On Wednesday 13 February 2019, after apparently 13 hours of difficult negotiations, the European Parliament, the Council of the EU and the European Commission spread some copyright love just in time for Valentine's Day and finally managed to reach political agreement on the text of the new Copyright Directive. The provisions aim to make copyright rules fit for the digital age and hope to bring 'tangible benefits' to the creative sectors, the press, researchers, educators, cultural heritage institutions and citizens alike. They aim to enhance the freedoms and rights enjoyed by internet users, allow copyright owners to obtain the money they deserve for their work through licensing agreements and clarify the legal framework within which online platforms operate. While we have not yet seen an official publication of the complete agreed text, unofficial publications of the most controversial Article 11 and Article 13 have been leaked.

Whilst there has been no doubt that EU copyright law needed updating for the digital age, there has been huge criticism as to how this is being achieved through the Directive. With all the controversy surrounding the proposals, it was clear that the provisional text was never going to please all interested parties. German MEP Axel Voss and the European Parliament's rapporteur for the new copyright legislation was all too aware of that and stated:

"Parliament would have liked a better outcome but… the nature of a compromise is that one is never entirely happy with it."

A quick re-cap of the issues

The four new mandatory copyright exceptions for digital uses in certain areas such as education, research, and cultural heritage have all been welcomed, but controversy has plagued the more controversial Articles 11 and 13 as to whether they will actually be fit for purpose or whether they will be too onerous on online platforms and media companies. Some opponents have expressed concerns that the draft provisions would change the shape of the internet as we know it.

Article 11 concerns the protection for the digital use of press publications and has previously been dubbed the 'link tax'. Article 11 is a new press publisher's right which allows publishers to obtain fair and proportionate remuneration for the digital use of their press publications by information society service providers. (e.g. big news aggregators like GoogleNews, search engines and other online platform operators). In turn, the provision allows the journalists to seek a fair share of any of the additional revenues that a press publisher may receive for the secondary use of a press publication by information society service providers.

Article 13, which has received the most publicity to date, relates to the use of protected content by online platforms that store and allow access to large amounts of content uploaded by their users. The concern within the creative industries has been that a large amount of copyright protected content has been making its way on to these online platforms without rightsholders' authorisation and they are not being adequately rewarded for the use of that creative content. However, the draft Article 13 has been blasted for being too onerous on online platforms because it essentially requires them to filter content so that infringing material is not available on their services. Large internet platforms have expressed grave concerns that they will lose a lot of internet traffic if the reforms go through and large US companies have said that the reforms would make it difficult for them to enter the European market.

Some of the major tech companies have been actively campaigning against the reforms and have gone as far as accusing the EU of acting against the will of the people. Axel Voss, however, has dismissed and criticised these negative campaigns and has accused these tech giants of disseminating misinformation about how the reforms will damage and restrict the internet. Voss claimed that various slogans being bandied around such as "link taxes" and "censorship machines" are all misleading slogans, aimed at scuppering the reforms.

The current agreement

Whilst we have not yet seen the official amended text, the European Parliament, the European Council and the European Commission have published press releases here, here and here and the European Commission has also published a comprehensive Q&A Fact Sheet explaining the reforms in some detail. See below for some of the main important points to note:

Article 11 – the Press

Publishers

This new press publishers' right will apply to online uses of press publications by information society services providers (e.g. news aggregators, media monitoring services) and it aims to strengthen the bargaining power of press publishers when it comes to negotiating licensing agreements for the use of their content by online platforms.

Journalists/authors

The Directive provides that journalists will also receive a fair share of any of the revenues generated by a press publisher for the secondary use of a press publication by information society service providers.

The above provision sets out to ensure the 'sustainability of the press sector….. to foster plural, independent and high-quality media, which are essential for the freedom of expression and the right to information…'

Hyperlinkingand snippets

Despite this provision being labelled the 'link tax', Article 11 states the protection granted under this Article "shall not apply to acts of hyperlinking".

According to the text adopted, the use of individual words and 'very short extracts' of press publications also does not fall within the scope of the new right. This means that information society service providers can use parts of a press publication (i.e. 'snippets') without the press publishers' authorisation, so a 'snippet' can continue to appear on Google News newsfeeds for example, or shared on Facebook, provided the extract is 'very short'. The Q&A clarifies that the impact on the effectiveness of the new right will be taken into account when assessing what 'very short extracts' are.

Individual users

The Directive does not apply to private or non-commercial uses carried out by individual users but online uses of press publications by large online platforms/services e.g. news aggregators. Therefore internet users will be at liberty to share content on social media and hyperlink to websites/newspapers, as they do currently.

Term

Various options have been proposed in relation to the appropriate term for this right and the agreed text states that press publications right will expire 2 years after the publication of the press publication.

Article 13 – the value gap

The press release issued by the European Parliament reminds us that "currently internet companies have little incentive to sign fair licensing agreements with rights holders, because they are not considered liable for the content that their users upload". They are of course obliged to remove infringing content once notified of its existence by the rightsholder, but this is not always effective and does not guarantee the rightsholder a fair revenue for their content. The Directive now aims to make internet companies liable for infringing content, which in turn "will enhance rightsholders' chances (notably musicians, performers and script authors, as well as publishers and journalist) to seek and secure fair licensing agreements".

According to the agreement, the platforms covered by Article 13 are considered to be carrying out acts of communication to the public or making available to the public, and therefore require authorisation from the relevant content owners. Where no licensing agreements have been concluded with rightsholders, in order to avoid liability, online platforms will need to fulfil the following: (i) make best efforts to obtain an authorisation, (ii) make best efforts to ensure the unavailability of unauthorised content regarding which rightholders have provided necessary and relevant information and (iii) act expeditiously to remove any unauthorised content following a notice received and make also their best efforts to prevent future uploads.

Special regime for smaller enterprises

The Q&A sheet states that 'new small platforms will benefit from a lighter regime in case there is no authorisation granted by rightholders'.

These new small platforms (e.g. start-up platforms) are categorised as those online service providers which have existed for less than three years in the EU and which have a turnover of less than 10 million euros and have less than 5 million monthly users. To avoid liability for unauthorised works, new small companies will only have to prove that they have made their best efforts to obtain an authorisation and that they have acted expeditiously to remove the unauthorised works notified by right holders from their platform.

However, if the audience of the small companies is higher than 5 million monthly viewers, they will also have to prove that they have made their best efforts to ensure that works that have been notified by rightholders do not reappear on the platform at a later stage.

Online platforms not affected

The Directive provides that uploading works to online encyclopaedias in a non-commercial way (e.g. Wikipedia), or open source software platforms (e.g. GitHub), will automatically be excluded.

Fair remuneration for authors and performers

Authors and performers will be able to claim additional remuneration from the distributor exploiting their rights when the remuneration originally agreed is disproportionately low when compared to the benefit derived by the distributor.

Comment

It will be interesting to see how the new draft compares to the amended draft we saw in September once the official text comes through. In the meantime, we must just glean what information we can from the unofficial publications of the relevant articles, press releases and Q&A made available by the European Parliament and Commission.

The provisions certainly seem to enhance the rights of creators by introducing mandatory negotiating mechanisms for them to obtain the remuneration they deserve, so content owners will be pleased with the outcome. Online platforms, on the other hand, may not be so satisfied. Whilst the new provisions do not appear to require online platforms to actually use filtering technology, in reality, this is perhaps what they will need to do to ensure they avoid liability. The wording surrounding 'best efforts' is also dubious. What exactly is best effort monitoring and how far do online platforms really have to go to ensure they are indeed making these best efforts? Does that wording actually have any value? What some online platforms consider to be onerous provisions, others see as perhaps too vague and possibly an easy way for online platforms to avoid liability - the exact opposite of what Article 13 sets out to achieve.

It does appear to be good news for memes and snippets, despite widespread concerns that the reforms would be tantamount to censorship and restrict freedom of expression. Quick to point out that memes are not banned and can still circulate for the purposes of quotation, criticism, review, caricature, parody or pastiche (as explicitly stated in the Recitals to Article 11), Axel Voss clarified that "….this deal contains numerous provisions which will guarantee that the internet remains a space for free expression. These provisions were not in themselves necessary because the directive will not be creating any new rights for rights holders. Yet we listened to concerns raised and chose to doubly guarantee the freedom of expression. The 'meme', the 'gif', the 'snippet' are now more protected than ever before".

It will certainly be interesting to see how the 'best efforts' wording under Article 13 and the words 'very short extracts' (which are not protected under Article 11) are interpreted at a national level, and possibly, if it becomes necessary, by the CJEU.

And the mandatory exceptions are good news for research organisations, universities, students, teachers and cultural heritage institutions as they will ensure wider access to knowledge by simplifying the copyright law in relation to text and data mining for research and other purposes, education and the preservation of cultural heritage.

Despite some very mixed views on the new draft, at least some progress has been made. The trilogue negotiations needed to come to an end and the final text agreed. However, how all these all these provisions will play out in practice remains to be seen.

Next steps

The Press Release published by the EU Council confirms that the provisionally agreed text still has to be endorsed by the relevant bodies of the Council and there must then be a final plenary vote by the European Parliament (where the 751 MEPs can accept or reject the bill) – in late March/April, ahead of the EP elections in May. Following that endorsement, it will be submitted for adoption by both institutions. Once the text has been confirmed and published on the Official Journal of the EU, Member States will have 24 months to implement the new rules into national law.

With a Brexit deal still very much up in the air, it remains to be seen whether the UK will have to implement these provisions into UK law. It depends on the final transition period agreed because under the current Withdrawal Agreement, the transition period ends before the implementation deadline, which, in theory, would mean that the UK would be under no obligation to implement the Directive. Whether it is implemented in the UK or not, however, it will certainly impact on UK businesses operating in Europe.

Watch this space.

For further information on the proposed Copyright Directive, see our previous blogs here,here and here.